Evaluating KKR Against Peers In Capital Markets Industry

In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating KKR KKR against its key competitors in the Capital Markets industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.

KKR Background

KKR & Co Inc is one of the world's largest alternative asset managers, with $552.8 billion in total managed assets, including $446.4 billion in fee-earning AUM, at the end of 2023. The company has two core segments: asset management (which includes private markets—private equity, credit, infrastructure, energy, and real estate—and public markets—primarily credit and hedge/investment fund platforms) and insurance (following the firm's initial investment in, and then ultimate purchase of, Global Atlantic Financial Group, which is engaged in retirement/annuity and life insurance lines as well as reinsurance). On the asset management side, private markets account for 50% of fee-earning AUM and 70% of base management fees, while public markets account for 50% and 30%, respectively.

Through a detailed examination of KKR, we can deduce the following trends:

• The stock's Price to Earnings ratio of 23.95 is lower than the industry average by 0.52x, suggesting potential value in the eyes of market participants.

• With a Price to Book ratio of 3.79, significantly falling below the industry average by 0.82x, it suggests undervaluation and the possibility of untapped growth prospects.

• The stock's relatively high Price to Sales ratio of 6.24, surpassing the industry average by 1.42x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 4.81% that is 0.58% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.68 Billion is 1.93x above the industry average, highlighting stronger profitability and robust cash flow generation.

• The gross profit of $1.12 Billion is 1.23x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 75.7% exceeds the industry average of 7.61%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

When examining KKR in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

• Among its top 4 peers, KKR is placed in the middle with a moderate debt-to-equity ratio of 2.16.

• This implies a balanced financial structure, with a reasonable proportion of debt and equity.

Key Takeaways

For KKR in the Capital Markets industry, the PE and PB ratios suggest the stock is undervalued compared to peers, while the PS ratio indicates overvaluation. In terms of ROE, EBITDA, gross profit, and revenue growth, KKR outperforms industry peers, indicating strong financial health and growth potential.

This article was generated by Benzinga's automated content engine and reviewed by an editor.